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13 Sep 2010, 19:05

Hey Vignes,

Not sure about your question. We're not assuming anything. We're trying to find something that explains the discrepancy, which is that somehow, the association gave away gifts worth the exact amount of the relevant pledges, but ended up making money. The only thing that could explain this is that the charity itself DID NOT pay retail price for the gifts (even though they were WORTH the exact value of the pledge).

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27 Jan 2011, 06:37

i have a question, if the gifts are not paid for , how can we say "amount paid for" even if it is $0? usually, IMO you say the gifts are free . Ex:- a question like "how much did u pay for those shirts?" should have the answer "i didn't pay for those" or "i got them for free" . i can't say "i paid $0" can i? is it correct formally??
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Re: During a single hour of a pledge drive for a public radio [#permalink]

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28 May 2014, 00:37

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Re: During a single hour of a pledge drive for a public radio [#permalink]

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08 Jul 2015, 20:24

Option B is misleading and is a potential trap if you think too much about it. Organizers can be surprised by how much money came in, but it doesn't say anything about running out of gifts. If organizers ran out of gifts, then the pledges were met with no gift at all. Of course, pledgers may withdraw if there is no gift... and the announcement only said that pledges were encouraged by the news that pledges would be met with a free gift that has a retail value equal to the pledge amount. It doesn't say that it was guaranteed. But that line of reasoning isn't sufficient to answer the question. It boils down to what you definitively know or don't know - you don't know that they ran out of free gifts.

Option D could mean that organizers paid $0. Another scenario would be that they paid 80% of the gifts, whereas sponsors donated the last 20%. So, $ pledge > $ paid for gifts by organizers. Answer D.

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During a single hour of a pledge drive for a public radio [#permalink]

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30 Jul 2015, 09:02

1

This post receivedKUDOS

kanigmat011 wrote:

can somebody explain option EI was unable to understand the wording

E) More money was raised during this hour than during the previous three hours, driving down the average out-of-pocket cost of the free gifts.

We take E as true, which means average cost must drop.

Average cost: Total C/QImagine each "gift" is what the pledgers are buying.Each item is $1; every donor pledges only $1Each item is matched with a gift of equal value, which essentially means that the pledge drive stops as soon the gifts are gone (and not that there is an infinite quantity of gifts on hand, though the organizers can simply go out and buy more gifts after receiving the pledges, thereby prolonging the pledge drive for as long as possible with an "unlimited" quantity).

It doesn't give us any information that we don't already know. That is, we already know that at the end of the day, average cost will be $1 in the example above , since all pledges are matched with an equivalent retail value. The total quantity could be 6 with an average cost that's $1.67 with $6 raised, which would still lead to an average cost of $1 at the end of the pledge drive. Or, it could be $100 in initial cost with $100 raised in pledges with an average cost of $1 after just the first hour. The total cost is equivalent to the total pledge amount in all cases.

If you think about it, it doesn't make sense to hold a pledge drive by spending the same amount of money on gifts as the amount you will receive from pledges - there are other costs to consider, too, such as shipping, utilities, etc... but that's an aside.

gmatclubot

During a single hour of a pledge drive for a public radio
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30 Jul 2015, 09:02